10.30.18
Forbes: 12 Industry Experts Share Their Near-Future Real Estate Predictions
For those looking to invest in real estate, understanding the current market is essential to striking an optimal deal. But for current property owners or aspiring investors, it’s equally important to know where the market is headed in the coming years. Any plans to buy, rent or sell in the near future could be significantly impacted by market conditions, and you may decide to make a move or wait it out depending on the circumstances.
To help you strategize your next real estate transaction, we asked the experts at Forbes Real Estate Council what they believe the most prevalent market trends will be in the next few years. Here’s what they had to say.
1. Luxury Correction
As the market continues to normalize after years of aspirational pricing, I think we will see a seismic shift in what luxury looks like. More people will start to move away from expansive second homes and look to build tiny homes with minimal carbon footprints and crafty built-ins. There’s now a real opening for the “tiny house movement” to be synonymous with luxury. – Elizabeth Ann Stribling-Kivlan, Stribling & Associates
2. Solid Underwriting
For multifamily valuation and investing, a return to more solid underwriting and basics is here to stay. The post-crash and recession aftermath days of rapidly escalating rent and lowering interest rates have ceased, which have tightened underwriting. – Lee Kiser, Kiser Group
3. Greater Price Separation Between Top-Tier And Low-Cost Housing
The market is already responding to growing society separation, offering both ultra-luxury residential properties with super-amenities and co-living arrangements. I foresee an even higher split in the future, ranging from mega-townhouses/palaces in large cities for the top 1% and ultra-condensed, low-cost, minimum-comfort housing for students, individuals and starters of society. – Elliot Bogod, Broadway Realty
4. Technological Takeover
The tech revolution will not happen overnight. It will be gradual and over-hyped, but it will come. Over time, technology and data will replace (most) humans in closing real estate transactions, in both sales and rentals, in the same way, it replaced the need for humans to market properties today. This won’t create mass unemployment in real estate services, but these jobs will look very different. – Anthemos Georgiades, Zumper
5. Disruption By Autonomous Vehicles
Driving around the Dallas market you will see cars marked “driverless vehicle” being tested around town. The biggest impact in real estate will be a reduced amount of parking spaces needed with autonomous vehicles being able to drop you off in front of your work and go park in a less prime space. We’ll see an opportunity to use some of the parking spaces for prime retail and restaurants instead. – Pamela J. Goodwin, Goodwin Commercial
6. Evolution From Commodity To Experience
For the past 100 years, real estate has mostly been used as a financial instrument, where the product was essentially a concrete slab being sold by the square foot on rigid, long-term contracts. Moving forward, a commercial real estate will evolve from being a commodity to a strategic weapon in the war for top talent that will be won and lost on experience. – Christopher Kelly, Convene
7. Rising Rates And Rising Prices
As many markets across the nation continue their growth trends while the construction industry lags behind demand, prices will continue to rise while interest rates bump upward. Secure your next investment property now with thorough due diligence and watch your investment pay off over the next few years. – Garratt Hasenstab, The Mountain Life Companies™
8. The Virtual Reality Revolution
Virtual reality (VR) will be the biggest trend in the real estate market over the next few years. Buyers will increasingly use VR technology to view homes without the hassle of attending an open house and sellers will be able to virtually stage their homes. This will save all parties in the transaction valuable time and money during the process. – Hillary Legrain, First Savings Mortgage Corporation
9. More Capital For Mid-Market Multifamily Transactions
As firms begin using AI to efficiently underwrite smaller and smaller deals, mid-market deals will see increased interest. Returns have eroded for the biggest deals in top markets nationally, but there’s still a ton of capital chasing deals. There’s nowhere else to put it except in increasingly smaller deals, and AI is the only way to efficiently underwrite enough opportunities to achieve this. – Marc Rutzen, Enodo Inc
10. Green Construction And Smart Tech For The Billions Of Homes Needed
It took 200,000 years to reach 1 billion humans on earth and now in just the past 200 years, we have added 6.5 billion more humans to make a grand total of just over 7.5 billion of us. The writing is on the wall: We are growing and going to see a lot of changes. Along with global growth comes global warming, so more construction will go green and be built to support smart homes. – Chris Ryan, BEYOND Properties Group
11. Increased Data Gathering And Usage
The ever-increasing thirst for data will drive the multifamily industry in the way we operate as well as interact with the owners of properties we manage. Business intelligence is driving decisions and defining the relationships as is the ease of accessing real-time data. This trend is sure to drive the development and enhancement of even more technology focused on BI-defining decision making. – Diane Batayeh, Village Green
12. Help From Artificial Intelligence Algorithms
The next big arms race in real estate may involve artificial intelligence. As buyers become savvier, investment in real estate will spike in the wake of low-interest rates, which has made the market more competitive. Algorithms could help investors find yield where they may not have looked before. – Ashkan Zandieh, RE:Tech
